COVID-19: Are new variants threatening summer holiday plans?

• UK Health Secretary Matt Hancock says the UK government is doing everything they can to allow summer holidays
• UK Prime Minister Boris Johnson said COVID vaccine passports could be introduced
• NHS to undergo major reform in 2021
• Pound Sterling (GBP) exchange rates under pressure after Bank of England (BoE) statement

After new travel rules and quarantine measures announced on Tuesday enraged avid holiday-goers and the aviation industry, Health Secretary Matt Hancock said on Thursday that the UK government is “doing everything we can to allow Brits to go abroad this summer.”

The UK government tightened travel restrictions after concerns were raised about new COVID-19 variants that are possibly resistant to current vaccines being imported into the country.

From February 15th, Britons travelling to the UK from “red list” countries will be required to self-isolate in designated quarantine hotels for 10 days at the cost of GBP 1750.

With no definite end date, many Britons are confused about whether they should go ahead with summer holiday bookings, especially following warnings from UK Prime Minister Boris Johnson and Transport Secretary Grant Shapps, who’ve urged Brits not to book holidays.

In a previous COVID press conference, Health Secretary Matt Hancock said he predicted a “great and free British summer”. However, PM Boris Johnson said it is “too early to tell whether overseas holidays will be possible this summer”.

Grant Shapps also advised Britons against booking summer holidays, both internationally and domestically due to ongoing uncertainty over new and potentially more lethal COVID strains.

Labour has urged the UK government to provide clarity on whether people can go ahead with summer holiday bookings, claiming that mixed messages from MPs are “creating chaos for families and businesses”.

Matt Hancock hit back at Labour’s claims to provide greater clarity on the issue, stating that “it is hard to offer certainty in a pandemic.”

The Health Secretary also said that before we worry about international travel, we should be thinking about how soon “we can see and hug our loved ones, which is of more significant importance.”

However, the Health Secretary is facing some backlash after he admitted that he has booked a summer getaway to Cornwall after a mixed day of messages over the travel farce.

Nonetheless, Mr Hancock hopes that the ongoing success of the UK’s vaccination programme will open up a path out of lockdown on a more permanent basis and allow Britons to return to some form of normality in the summer months.

According to the latest government statistics, more than 13 million people have been vaccinated against COVID-19 and approximately 90% of people that had been offered a coronavirus vaccine have accepted.

UK Prime Minister Boris Johnson hopes to reveal whether Brits can travel abroad in the summer when he unveils his lockdown exit roadmap on February 22nd. While ministers have denied claims that the UK will introduce vaccine passports, Mr Johnson said he is not against vaccine apps for international travel.

Boris Johnson supports the idea of COVID vaccine passports

During a COVID-19 press conference, UK Prime Minister Boris Johnson said the UK government could introduce vaccine passports or something in that effect to confirm that vaccinated Britons are safe to travel abroad.

The measure could be introduced once the COVID-19 infection rate in the UK is brought under control and the R-rate has fallen to sustained lows.

While Mr Johnson did not confirm whether the UK government is working with travel firms to implement vaccine tracking technology, he said that “all kinds of apps” might be used once Britain’s vaccine rollout is ramped up.

His comments came after Transport Secretary, Grant Shapps, said he had been in talks with Singapore and the United States over feasible ways to resume international travel to allow summer holidays.

Meanwhile, the International Air Transport Association (IATA) said they had held fruitful discussions with UK MPs concerning a prototype app called TravelPass.

It comes hours after the UK government tightened travel restrictions for a second time this year.

Earlier this week, Matt Hancock unveiled a new triple-step testing system for all international arrivals and mandatory quarantine hotels for Britons arriving into the UK from any of the 33 countries on the government’s red list.

The penalty for those caught lying about having visited a country on the government’s red list is also severe. Travellers concealing information could face fines up to GBP 10,000 and ten years imprisonment, which some Britons feel is preposterous given that the maximum sentence for some violent and sexual offences is seven years.

However, there is hope that these new rules won’t be enforced for too long given that the UK’s vaccine rollout appears to be effectively reducing the number of coronavirus cases and deaths.

AstraZeneca also confirmed that it is on course to deliver a new COVID vaccine in the autumn which will target new variants of the virus. While the vaccine is in its early development stage, this should help unlock the UK economy on a permanent basis as it will reduce the pressure on the NHS.

UK ministers are also pressing ahead with plans to reform the NHS, with Health Secretary Matt Hancock due to publish the first white paper on NHS reform since 2010 today.

The news comes amid growing speculation that NHS Chief Executive Officer, Sir Simon Stevens is stepping down from his position this year.

According to Mr Hancock, the government wants to gain more control over the NHS to create a “more integrated, more innovative and responsive” service.

However, questions have been raised over why the planned shake-up, which could trigger a potentially destabilising reorganisation of the UK’s health service is being executed during the coronavirus crisis.

Although the Department of Health and Social Care has justified Boris Johnson’s decision to act now, NHS bodies and health experts have warned ministers that the plan to re-centralise the NHS could backfire.

GBP/USD and GBP/EUR under pressure

The British pound to US dollar (GBP/USD) exchange rate and the British pound to euro (GBP/EUR) exchange rate rallied to fresh highs in mid-week trade, supported by fading expectations for a Bank of England (BoE) interest rate cut and the UK’s rapid vaccine rollout.

However, in the absence of any fresh UK economic data today, GBP/USD and GBP/EUR has come under pressure in foreign exchange (FX) markets.

At the time of writing, the British pound to US dollar (GBP/USD) exchange rate is trading flat at USD 1.3817 and the British pound to euro (GBP/EUR) exchange rate has slipped below EUR 1.14 to EUR 1.1394.

Comments made by Bank of England Governor, Andrew Bailey, over the EU shutting the UK out of its financial markets has also dented GBP exchange rates.

While US jobless claims figures have cushioned GBP/USD heading into the North American session, GBP traders appear to be cautious ahead of Friday’s UK gross domestic product (GDP) data.

GBP/EUR is also lacking direction ahead of growth data, while signs that the EU is ramping up its COVID-19 vaccination programme is offering the euro some (EUR) support on Thursday.